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Does Globalization Help or Hurt the World’s Poor?
As debates over economic globalization rage, one writer ponders whether “expansion of foreign trade and investment” influences the world’s poor. Author Pranab Bardhan notes that the answer is neither a simple yes or no. By certain measures, the level of extreme poverty has lessened worldwide, but that doesn’t necessarily correlate with globalization and could be the result of some domestic reforms. Foreign investment has created new jobs for many people and, while exploitative conditions sometimes prevail, the work opens new, if limited opportunities not previously available. Others argue that globalization is a “race to the bottom,” with countries neglecting social programs. However, the author notes that social and economic interests can support each other. Chronic poverty and environmental destruction are not the inevitable results of globalization, but rather of domestic policy and institutional failure. Those on either side of the globalization divide see the wisdom of coordinating transnational companies, multilateral organizations, governments and local aid groups to bring relief to the poor. Maximizing globalization’s potential and minimize negative effects requires a cohesive integration of domestic and international policies – including capital controls, immigration reform and research – and regard for long-term consequences must replace a stampede toward globalization when countries lack the structure to respond. – YaleGlobal